INTRODUCTION
The Insurance Contracts Act 1984 requires insurance companies to provide certain information to people intending to insure with them. The information concerns the duty of disclosure of an intending Insured and the effect of particular types of clauses in a proposed insurance policy. Where an Insurance Broker is involved in the transaction, the information is to be provided by the broker. The Insurance (Agents and Brokers) Act 1984 also requires us to inform you about some other matters where they are relevant to particular policies.
WHAT INFORMATION DOES AN INSURANCE COMPANY/BROKER HAVE TO GIVE YOU?
In general terms, the kind of information, which an insurance company/broker must give you, is as follows:
YOUR DUTY OF DISCLOSURE
Before you enter into a contract of general insurance with an Insurer, you have a duty, under the Insurance Contracts Act 1984, to disclose to the Insurer every matter that you know, or could reasonably be expected to know, that is relevant to the Insurer’s decision whether to accept the risk of the insurance, and if so on what terms.
You have the same duty to disclose those matters to the Insurer before you renew, extend, vary or reinstate a contract of general insurance.
Your duty, however, does not require disclosure of matter:
• that diminishes the risk to be undertaken by the Insurer,
• that is of common knowledge,
• that your Insurer knows or, in the ordinary course of his business, ought to know,
• as to which compliance with your duty is waived by the Insurer.
NON-DISCLOSURE
If you fail to comply with your duty of disclosure, the Insurer may be entitled to reduce his liability under the contract in respect of a claim or may cancel the contract.
If your non-disclosure is fraudulent, the Insurer may also have the option of avoiding the contract from its beginning.
Please note that your duty applies also when you seek to renew, extend, alter or reinstate a policy.
Alternatively, if you have any query about whether information needs to be disclosed, please contact our office.
DUTY OF GOOD FAITH
Both parties to an insurance contract, the insurer and the insured, must act towards each other with the utmost good faith. If you fail to do so, the insurer can cancel your insurance. If the insurer fails to do so, you may be able to sue the insurer.
YOUR DUTY TO TAKE REASONABLE CARE NOT TO MAKE A MISREPRESENTATION
You must take reasonable care not to make a misrepresentation to The Insurer. This responsibility applies until The Insurer issues You with a Policy for the first time or agree to renew, extend, vary/change, or reinstate Your Policy.
You must answer the insurer’s questions honestly, accurately and to the best of Your knowledge. A misrepresentation includes a statement that is false, partially false, or which does not fairly reflect the truth. It is not misrepresentation if You do not answer a question or if Your answer is obviously incomplete or irrelevant to the question asked.
The responsibility to take reasonable care not to make a misrepresentation applies to everyone who will be insured under the policy. If You are answering questions on behalf of anyone, We will treat Your answers or representations as theirs.
Whether or not You have taken reasonable care not to make a misrepresentation is to be determined having regard to all relevant circumstances, including the type of insurance, who it is intended to be sold to, whether You are represented by IMC Insurance Brokers, Your particular characteristics and circumstances The Insurer is aware of.
If You do not meet the above Duty, The Insurer may reject or not fully pay Your claim and/or cancel Your Policy. If the misrepresentation was deliberate or reckless, this is an act of fraud, and The Insurer may treat Your Policy as if it never existed.
If the above information or questions are unclear, please contact Us.
